October 2019

This page may not make a lot sense. The change in the program now requires 125,000 points. This page shows me working through the math on what it would take to get 125,000 points and is it worth it. The overall summary is this: If we take 4 trips a year and over spend on hotels by about $900 we can earn free companion. Having free companion would save us about $2,000 per year on those 4 trips. If we take more than 4 we save even more.

I have 3 Southwest credit cards so you will see 3 annual fees for the credit cards in the math below.

Rapid Reward Points - The Math

Starting January 1st, 2020 Southwest will require 125,000 points to be earned between Jan 1 and Dec 31 to achieve Free Companion. That is an increase of 15,000 points from 110,000 that was required. That 15,000 has promted me to do some math to see if the program still has value. Overall this is what I figured out for me: I need to take at least 4 trips per year in order to achieve free companion and doing so will save me $2,000 a year ($500 per trip) on travel expenses the following year. There is a chance I could get free companion in only 3 trips but it would require a lot of tricky spending and booking. If I have free companion status and I take more than 4 trips per year I would save $90 per trip instead of the original $500 saved per trip. With Free Companion and taking 6 trips per year I would save about $3,800 per year. Our average trip without free companion (flight, hotel, car, food, enterainment, fees, etc) would cost around $2,900 but with free companion it's closer to $1,800. Is it worth it - YES (if I take at least 4 trips per year).

Typical Annual Points

15,000 (6k + 6k + 3k) points for annual renewals on the Credit Cards - $99 + $99 + $69 = $267

I have the Preimer, Plus and Business Card. There is one more card called Priority which carries a $149 per year annual fee and gets an additional 7,500 points along with some other perks. I'm thinking about signing up for it. The bad part is I would not get any "sign up bonus points" but the 7,500 annual additional points goes a long way in covering the additional 15,000 points required to get free companion.

Base spending (cable, internet, some business expenses, cell phones, food, gas, dining, hotels, car rentals, entertainment, subscriptions, etc) 3,200 points per month x 12 = 38,400. There are a few bigger ticket items that pop up every year - medical bills, car repairs, car insurance, home repairs, etc. On average I could see around 40,000 points per year. Some years I have seen a number closer to 55,000 per year because of hotel and car rental bonuses and other purchase (medical, home improvements, car repairs, etc).

Shopping and Dining could add 9,000 to 12,000 to the annual balance. In 2019 these 2 had a grand total of 11,300 for me and that was around mid October. Christmas is still coming so I could earn more in this category. Dining was about 3,500 of the balance. The rest of the points where made by purchasing shoes from shoes.com, glasses from eyebuydirect.com, contacts from 1800contacts.com and autoparts from Advance Auto. If I really push it I think I could pull 14,000 a year from this category. About 4 times a year, the rapid rewards shopping program offers bonus points. If you spend a certain amount during the time period they will credit your account with bonus points. Sometimes the bonus points can be around 1,500 but you need to spend a fair amount to get that. I usually try to time my shopping to fall into the specials and get 500 or 750 points extra.

Adding up the yearly points to see how close I am to Free Companion:

Total per year: 40,000 base + 15,000 credit card annuals + 8,000 shopping/dining programs = 63,000 points per year. With additional Priority card this total would be 70,800. With a little extra planning on spending/dining this number could push up by another 2,000 so the best base line could be 72,800 which means 60,300 additional would be needed to get Free Companion.

Pushing the Max: If I really push each category (keep in mind this is the ultimate max) I could get 65,000 on the credit card points (not all spending - getting some double points for certian purchases and referrals), 14,000 shopping/dining and 15,000 a year in annual bonuses. That totals: 94,000 points. That means I'm only 31,000 away for free companion which would be made up in hotel bonuses. If I signed up for the 4th credit card (Priority) I would get an addtional 7,500 points bring the total to 101,500 base points leaving 23,500 needed for free companion.

What's the cost to purchase points from Southwest.com?

To purchase points you pay between .0195 to .01787 depending on amount purchased. Purchased points do not count toward free companion but there is a chance that the charged amount could count for 2x (I need to look into this). So, if you purchased 60K twice it would yield 120K points (don't count towards free companion) and possibily an additional 4,290 points towards free companion. Not the best deal in the world. You are better off purchasing airline tickets directly with cash/credit. The only time you should purchase points is if they are running a special where they count towards free companion or you just need a few thousand points to get a flight covered.

3,000 points for $58.50

60,000 points for $1,072.50

125,000 - 63,000 = 62,000 points needed

To purchase the points = 62,000 x .01787 = $1,107.94

Usually bonus points via hotels cost about double the price so I would except to pay a max of $2,216 in hotel fees to earn enough points to get free companion. Later in this article I will test that theory with real numbers.

Theory of Free Companion - Just some rough guesses.

(next page goes into actual testing of the theory with real flight and hotel costs)

A typical round trip ticket x 2 from MKE to Vegas is about $859. $859 x 3 trips = $2,577

If you are going to take 3 trips throughout the year - need to purchase hotels anyway. Let's say each trip is 3 nights - lowest price would be around $150 per night - each trip would be around $450 in hotel costs so $450 x 3 = $1,350 in hotels for all 3 trips. To get bonus points you will have to pay double that amount so overpay by $1,350 and that will get your free companion. That overpay of $1,350 is what you "paid" for the flights you don't pay for the next year. That's confusing.... how can I say that better? If you don't pay the $1,350 to get free companion and you take 4 trips the following year you will have to pay for your flights which could be $800 per trip x 4 = $3,200. So, paying the $1,350 so you don't have to pay the $3,200 next year makes sense.

Tricks to earn some additional points:

Purchase gift cards to make everyday purchases - food, gas, etc. You can earn .5 extra points per dollar but there is a service fee to get the cards of about $5 per $500 dollars for digital and $15 per $500 for a real card. If you can do 15,000 in spending on the cards you could pull 22,500 points.

Time your online shopping to line up with specials they are running at Rapid Rewards Shopping. Add places you like to shop to your favorites list. You will get emails letting you know of specials deals and if they increase their points per dollar. I have seen some stores jump from 3 points per dollar to 9 points per dollar for a limited time. That's when you pounce!

Double book a hotel or book 1 night for a hotel on the last day of your trip. Check in and then leave. Get the points for the room to boost your free companion points. This one is kind of a waste in the sense that you paying for something you are not even going to use but if you need 10,000 points or less to get free companion the math might make sense.

You don't have to fly somewhere to get a hotel room with bonus points. There are local hotels (like within a 2 hour drive) that offer bonus points. Schedule a weekend get-a-way to earn some points.

Car rentals usually yield 600 bonus points and sometimes 1,200. The amount you charge on your card for the rental usually gets double points. The average rental is about $220 so each rental should get you 600 + 220 = 820 bonus points.

Sign up for all 4 credit cards to get 22,500 points per year in annual bonuses.

Using real flight and hotel costs and bonus points

One year - 3 trips - All trips are 4 day - Thursday Feb 6th thru Sunday Feb 9th in 2020.

Trip 1 - Las Vegas

Trip 2 - Orlando Florida

Trip 3 - Washington DC

Trip 1: Las Vegas

Flight: $390 x 2 = $780 (x6 for points = 4,680)

Hotel: Four Queens:

Base: $336 for 3,000 points

Middle: $450 for 9,000 points

Top (boost): $565 for 15,000 points

Trip costs total: Low: $1,116, Mid: $1,230, Top: $1,345, Dif top/bottom: $229

Free Companion = Hotel Option + $22

Trip 2: Orlando Florida

Flight: $408 x 2 = $816 (x6 for points = 4,896)

Hotel: Westgate Towers Resort

Base: $336 for 5,000 points

Middle: $450 for 11,000 points

Top: $565 for 17,000 points

Trip costs total: Low: $1,152, Mid: $1,266, Top: $1,381, Dif top/bottom: $229

Free Companion = Hotel Option + $22

Trip 3: Washington DC

Flight: $301 x 2 = $602 (x6 for points = 3,612)

Hotel: Kellogg Conference Hotel

Base: $358 for 4,000 points

Middle: $472 for 10,000 points

Top: $565 for 16,000 points

Trip costs total: Low: $960, Mid: $1,074, Top: $1,167, Dif top/bottom: $207

Free Companion = Hotel Option + $22

Taking top on each trip would yield 15,000 + 17,000 + 16,000 = 48,000 points for $665.

48,000 hotel points + 63,000 base points: 111,000 points - missed free companion by 14,000 points.

Same math but using the best base number of points on the credit card + dining of 72,800.

48,000 hotel points + 72,800 base points: 120,800 points - missed free companion by 4,800 points.

When you see a "4th Trip" added it's a duplicate of Trip 1 to Vegas.

Add a 4th trip: 48,000 + 16,000 = 64,000 for ($665 + $229) $894

64,000 points + 63,000 base points: 127,000 points... FREE COMPANION. Once you have free companion do additional trips but pick the cheapest hotel options. There is no reason to get more points via the hotels. It's better to save that money and apply it to the following year's travel to earn free companion again. If you are running low on points it cheaper to purchase the points directly from Southwest.com vs paying extra for hotels.

Same math but using the best base number of of 72,800.

64,000 hotel points + 72,800 base points: 136,800 points - way over the 125K needed.

Spending $894 saves on the flights so instead of paying $2,978 in flight costs for 4 trips you save $2,084 dollars or about $500 per trip.

Total cost for 4 trips using the low end hotel costs and paying for flights: $4,344

Net gain in points for the trips: Flight 17,868, Hotels: 12,000, Total: 29,868 points

Total cost for 4 trips using the low end hotel costs and paying for 1 flight and using points for the other flight: $2,855 and around 99,866 points.

Net gain in points for the trips: Flight 8,934, Hotels 12,000, Total 20,934

Total cost for 3 trips using the low end hotel costs and paying for flights: $3,228

Net gain in points for the trips: Flight 13,188, Hotels: 12,000, Total 25,188

Total cost for 3 trips using the low end hotel costs and paying for 1 flight and using points for the other flight: $1,756 and around 73,266 points.

Net gain in points for the trips: Flight 6,594, Hotels 12,000, Total 18,564

Using points to pay for flights and using your credit card (cash) to pay for hotels makes more sense if I'm trying to get free companion.

If I don't have free companion and want to earn it I would try to take 2 or 3 local trips and get bonus points from hotels in your area. That way you don't have to pay for flights.